You've saved up money, handed in your resignation, and now you're wondering: "Exactly how long will my savings actually last?"
This is probably the most important question you can ask after quitting your job. The answer determines whether you'll have peaceful months to plan your next move, or sleepless nights worrying about money.
Here's the thing: most people drastically overestimate OR underestimate their runway. They forget about inflation, unexpected expenses, or don't account for the money they'll actually save by not working.
In this guide, I'll show you exactly how to calculate your real financial runway, what factors affect how long your money lasts, and proven strategies to stretch it further than you thought possible.
Why Getting This Wrong Can Ruin Everything
Miscalculating your financial runway isn't just a math error—it can destroy your entire transition plan.
Overestimate Your Runway
You'll get comfortable, spend freely, and suddenly panic when money runs low. This leads to desperate job hunting and accepting poor offers.
Underestimate Your Runway
You'll live in constant stress, make conservative decisions, and might even go back to a job you hate because you think you're "running out of time."
The solution? Calculate your runway accurately, then plan with that number.
The Basic Runway Formula
Simple Version:
Example: Sarah's Basic Calculation
Savings: $24,000
Monthly expenses: $3,000
Runway: $24,000 ÷ $3,000 = 8 months
But this simple calculation misses a lot. Let's make it more accurate.
Advanced Version (More Accurate):
Don't touch your emergency fund for living expenses
Account for any income you'll have while not working
This gives you a much more realistic timeline
6 Critical Factors That Change Everything
1. Inflation
Your expenses will gradually increase over time. At 3% annual inflation, $3,000/month becomes $3,075 after 3 months, $3,225 after 9 months.
2. Investment Returns
If your savings earn 4% annually, they'll last longer. A $50,000 balance earning returns stretches further than cash under your mattress.
3. Side Income
Even $500/month from freelancing dramatically extends your runway. $1,000/month can nearly double it.
4. Expense Changes
No commute, work clothes, or daily coffee runs? You might save $200-500/month. But you might also spend more on healthcare or entertainment.
5. Unexpected Costs
Car repairs, medical bills, family emergencies. Plan for at least one surprise expense every 6 months.
6. Taxes
Side income, freelance work, and investment gains are taxable. Factor in tax obligations to avoid surprises.
Real-World Runway Calculations
Mike: The Conservative Saver
Single, Low RiskJessica: The Side Hustler
Freelancer IncomeDavid & Lisa: The Family
Two Kids, MortgageCalculate Your Exact Runway
Stop guessing and get precise numbers. Our calculator factors in inflation, investment returns, side income, and tax implications to show you exactly how long your savings will last.
Run My Runway Calculation5 Proven Ways to Make Your Money Last Longer
Cut Variable Expenses First
Target savings: $200-500/month
- Cancel unused subscriptions
- Cook more meals at home
- Reduce entertainment spending
- Shop with a list and stick to it
Generate Side Income
Target income: $300-1,500/month
- Freelance in your expertise area
- Sell products online (Etsy, eBay)
- Offer consulting or coaching
- Part-time remote work
Optimize Your Savings Placement
Target return: 2-5% annually
- High-yield savings for emergency fund
- Short-term CDs for 6+ month money
- Conservative investments for longer runway
- Keep 2-3 months in immediately accessible cash
Take Advantage of Unemployment Benefits
Potential benefit: $200-600/week
- File for unemployment if you qualify
- Understand your state's benefit structure
- Meet all reporting requirements
- Consider part-time work limits
Sell Assets You Don't Need
One-time boost: $500-5,000+
- Unused furniture and electronics
- Second car or expensive vehicle
- Jewelry, collectibles, hobby items
- Clothes, books, and household items
4 Expensive Mistakes That Drain Your Runway
Lifestyle Inflation
Thinking you have "plenty of time" and spending freely in the first few months. This is the #1 runway killer.
Touching Emergency Funds
Using your emergency fund for regular living expenses instead of keeping it for actual emergencies.
Ignoring Taxes
Forgetting that side income, freelance work, and investment gains create tax obligations.
Static Planning
Calculating your runway once and never updating it as circumstances change.
Tools to Help You Plan Better
Quit My Job Calculator
See exactly how long your savings will last with inflation, returns, and side income factored in.
Try CalculatorEmergency Fund Calculator
Determine how much to keep in your emergency fund vs. available for living expenses.
Calculate FundFrequently Asked Questions
How long should my savings last if I have no other income?
Ideally, at least 6-12 months of expenses. This gives you enough time to job search without panic, negotiate offers properly, and handle unexpected delays. If you're in a specialized field or senior role, consider 12+ months since those job searches typically take longer.
Should I factor in inflation when calculating my runway?
Absolutely. At 3% annual inflation, your expenses increase by about 0.25% each month. For a 12-month runway, this could reduce your timeline by 2-3 weeks. Use our calculator to see inflation's impact on your specific situation.
Can I count investment returns in my runway calculation?
Yes, but be conservative. If your savings are in a high-yield savings account earning 4% annually, factor that in. For stock investments, use a lower expected return (maybe 5-7% annually) since markets can be volatile. Never count on returns from risky investments for essential living expenses.
What if my expenses change after quitting?
Common changes: You'll save on commuting, work clothes, and daily coffee, but might spend more on health insurance, entertainment, or eating out. Track your actual expenses for the first 1-2 months, then adjust your runway calculation accordingly.
Should I use all my savings or keep some as an emergency fund?
Keep a separate emergency fund. If you have $30,000 saved, keep $6,000-9,000 as an emergency fund and use $21,000-24,000 for living expenses. This protects you from car repairs, medical bills, or other surprises that could derail your transition.
How do I account for side income in my calculation?
Use your net (after-tax) side income and subtract it from your monthly expenses. If you need $3,000/month and earn $800/month from freelancing, your actual monthly draw from savings is only $2,200. This can significantly extend your runway.
Key Takeaways
Use the advanced formula: (Total Savings - Emergency Fund) ÷ (Monthly Expenses - Side Income) = Real Runway
Factor in inflation (adds ~0.25% to monthly expenses), investment returns (can extend runway 10-15%), and taxes on side income
Recalculate monthly as your circumstances change—expenses, income, and investment returns all fluctuate
Extend your runway by cutting variable expenses ($200-500/month), generating side income ($300-1500/month), and optimizing where you keep your money
Avoid the big mistakes: lifestyle inflation, touching emergency funds, ignoring taxes, and never updating your calculations
Ready to get precise numbers?
Calculate My Exact Runway